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LOANS ISSUED | 12 Months Ended
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Mar. 31, 2025
Receivables [Abstract] |
LOANS ISSUED | LOANS ISSUED Loans issued as of March 31, 2025, consisted of the following:
| Amount Outstanding |  | Due Dates |  | Average Interest Rate |  | Fair Value of Collateral |  | Loan Currency
Mortgage loans | $ | 924,530 |  |  | April 2025 - March 2050 |  | 11.4% |  | $ | 924,386 |  |  | KZT
Uncollateralized bank customer loans | 249,448 |  |  | April 2025 - March 2045 |  | 28.1% |  | — |  |  | KZT
Right of claim for purchased retail loans | 183,635 |  |  | April 2025 - March 2030 |  | 15.0% |  | 183,635 |  |  | KZT
Car loans | 156,340 |  |  | April 2025 - April 2032 |  | 24.2% |  | 155,320 |  |  | KZT
Collateralized bank customer loans | 148,759 |  |  | April 2025 - July 2043 |  | 19.6% |  | 128,543 |  |  | KZT
Other | 7,838 |  |  | April 2025 - September 2029 |  | 18.00% / 12.70%/ 3.00% |  | 29 |  |  | KZT/EUR/USD
Allowance for loans issued | (75,115) |  |  |  |  |  |  |  |  |
Total loans issued | $ | 1,595,435 |  |  |  |  |  |  |  |  |
The Group provides mortgage loans to borrowers on behalf of the JSC Kazakhstan Sustainability Fund ("Program Operator") related to the state mortgage program "7-20-25" and transfers the rights of claim on the mortgage loans to the Program Operator. The proceeds received from these transfers are presented within funds received under state program for financing of mortgage loans in the Consolidated Statements of Cash Flows. Under this program, borrowers can receive a mortgage at an interest rate of 7%, subject to not less than 20% down payment, for 25 years, and the interest payments received by the Group are recognized as interest income in the Group's Consolidated Statements of Operations and Statements of Other Comprehensive Income. In accordance with the program and trust management agreement for the program, Group services the transferred loans and remits all repayments of principal it receives plus 4% of the 7% interest received to the Program Operator. The interest paid to the Program Operator is recognized as interest expense in the Consolidated Statements of Operations and Statements of Other Comprehensive Income. The remaining 3% of the 7% interest is retained by Group. Under the program and trust management agreement, Group is required to repurchase the rights to make claims on the transferred loans when either loan principal repayments or interest payments are overdue 90 days or more. The repurchase of overdue loans is performed at the loans' nominal value and is presented within repurchase of mortgage loans under the State Program in the Consolidated Statements of Cash Flows. Since the Group transfers the rights to make claims on the loans with recourse for loans that are more than 90 days past due, retains part of the interest received on the loans and agrees to service the loans after the sale of the loans to the Program Operator, the Group has determined that it retains control over the loans transferred and continues recognizing the loans, which are accounted for as secured borrowings of the Group in accordance with ASC 860, Transfers and Servicing. As the Group continues to recognize the loans as assets, it also recognizes the associated liability equal to the proceeds received from the Program Operator, which is presented separately as liability arising from continuing involvement in the Consolidated Balance Sheets. This liability accrues 4% interest annual as described above. As of March 31, 2025 and March 31, 2024, the corresponding liability amounte d to $503,705 and $521,885, respectively. As of March 31, 2025 and March 31, 2024, mortgage loans include loans under the state mortgage program "7-20-25" with an aggregate principal amount of $511,851 and $532,389, respectively, were presented within loans issued in the Consolidated Balance Sheets. The Group has an agreement with FFIN Credit, a company established and controlled by FRHC's controlling shareholder, chairman and chief executive officer, Timur Turlov, to purchase uncollateralized retail loans. FFIN Credit is a non-bank credit institution that issues loans in Kazakhstan under simplified lending procedures. FFIN Credit was created as a pilot project to test and improve the scoring models used for qualifying and issuing loans. The principal operation of FFIN Credit is to provide loans to customers online using biometric identification and its proprietary scoring process. Following the successful pilot, the Company intends to either acquire FFIN Credit from Mr. Turlov or implement an in-house solution to replicate its functions, ensuring continuity and scalability of the lending operations. The bank has legal ownership over purchase from FFIN Credit uncollateralized retail loans, however, in accordance with U.S. GAAP requirements, the Group does not recognize those loans, since effective control over the transferred loans are maintained by FFIN Credit. Instead, the Group recognizes the loans receivable from FFIN Credit presented on the consolidated balance sheets within the loans issued. As of March 31, 2025 and March 31, 2024, right of claims for purchased retail loans in the amount of $183,635 and $146,152, respectively. The total accrued interest for loans issued amounted $13,385 as of March 31, 2025 and $8,327 as of March 31, 2024. Loans issued as of March 31, 2024, consisted of the following:
| Amount Outstanding |  | Due Dates |  | Average Interest Rate |  | Fair Value of Collateral |  | Loan Currency
Mortgage loans | $ | 741,312 |  |  | April, 2024 - March, 2049 |  | 10.3% |  | $ | 740,462 |  |  | KZT
Car loans | 262,708 |  |  | April, 2024 - March, 2031 |  | 23.9% |  | 259,755 |  |  | KZT
Uncollateralized bank customer loans | 245,188 |  |  | April, 2024 - March, 2044 |  | 27.4% |  | — |  |  | KZT
Right of claims for purchased retail loans | 146,152 |  |  | April, 2024 - March, 2029 |  | 15.0% |  | 146,152 |  |  | KZT
Collateralized bank customer loans | 22,299 |  |  | June, 2024 - July, 2043 |  | 19.1% |  | 22,270 |  |  | KZT
Subordinated loan | 5,037 |  |  | December, 2025 |  | 3.0% |  | — |  |  | USD
Other | 2,638 |  |  | April, 2024 - January, 2029 |  | 18.6%/15.0%/2.5% |  | 18 |  |  | KZT\USD/EUR
Allowance for loans issued | (43,619) |  |  |  |  |  |  |  |  |
Total loans issued | $ | 1,381,715 |  |  |  |  |  |  |  |  |
Credit quality indicators Freedom Bank KZ uses a loan portfolio quality classification system that indicates signs of a significant increase in credit risk and contractual impairment, depending on the analysis of reasonable and supportable information available at the reporting date. The loan portfolio is classified into "not credit impaired", "with significant increase in credit risk" and "credit impaired" agreements. Loans "not credit impaired" under the agreement are serviced as usual, there are no primary signs of an increase in credit risk. Agreements classified as "with significant increase in credit risk" represent loans for which there is an increase in the credit risk expected over the life of the agreement compared to the initial risk at the date of recognition of the loan. In practice, the presence of overdue debt on principal and interest for a period of more than 30 days or the absolute probability of default threshold PD exceeds 20%. Agreements classified as "credit impaired" represent loans for which at the reporting date there are signs of impairment, the borrower has been in default for 90 or more days for individuals and 60 or more days for legal entities, the borrower for the last 6 months for individuals and 12 months for legal entities restructured the contract due to the deterioration of the financial condition, the borrower is recognized as credit impaired, the presence of a sign of default, a sign of bankruptcy, the deterioration of the financial performance of the borrower, the presence of other information indicating the presence of a high credit risk. The table below presents the Group's loan portfolio by credit quality classification and origination year as of March 31, 2025. Current vintage disclosure is the requirement due to first adoption of ASC 326.
| Term Loans by Origination Year
| 2025 |  | 2024 |  | 2023 |  | 2022 |  | 2021 |  | Prior |  | Revolving loans |  | Total
Mortgage loans | $ | 336,535 |  |  | $ | 186,816 |  |  | $ | 370,588 |  |  | $ | 30,591 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 924,530 |
that are not credit impaired | 336,051 |  |  | 184,610 |  |  | 367,918 |  |  | 29,876 |  |  | — |  |  | — |  |  | — |  |  | 918,455 |
with significant increase in credit risk | 410 |  |  | 1,361 |  |  | 1,402 |  |  | 340 |  |  | — |  |  | — |  |  | — |  |  | 3,513 |
that are credit impaired | 74 |  |  | 845 |  |  | 1,268 |  |  | 375 |  |  | — |  |  | — |  |  | — |  |  | 2,562 |
Uncollateralized bank customer loans | 110,094 |  |  | 120,583 |  |  | 18,771 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 249,448 |
that are not credit impaired | 108,045 |  |  | 103,320 |  |  | 15,590 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 226,955 |
with significant increase in credit risk | 1,011 |  |  | 3,557 |  |  | 663 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 5,231 |
that are credit impaired | 1,038 |  |  | 13,706 |  |  | 2,518 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 17,262 |
Right of claim for purchased retail loans | 151,237 |  |  | 30,702 |  |  | 1,688 |  |  | 8 |  |  | — |  |  | — |  |  | — |  |  | 183,635 |
that are not credit impaired | 151,237 |  |  | 30,702 |  |  | 1,688 |  |  | 8 |  |  | — |  |  | — |  |  | — |  |  | 183,635 |
with significant increase in credit risk | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
that are credit impaired | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Car loans | 5,974 |  |  | 116,459 |  |  | 33,907 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 156,340 |
that are not credit impaired | 5,974 |  |  | 110,871 |  |  | 26,014 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 142,859 |
with significant increase in credit risk | — |  |  | 1,603 |  |  | 836 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 2,439 |
that are credit impaired | — |  |  | 3,985 |  |  | 7,057 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 11,042 |
Collateralized bank customer loans | 140,835 |  |  | 7,788 |  |  | 136 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 148,759 |
that are not credit impaired | 138,761 |  |  | 7,498 |  |  | 136 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 146,395 |
with significant increase in credit risk | 2,020 |  |  | 73 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 2,093 |
that are credit impaired | 54 |  |  | 217 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 271 |
Other | 232 |  |  | 1,237 |  |  | 6,323 |  |  | 46 |  |  | — |  |  | — |  |  | — |  |  | 7,838 |
that are not credit impaired | 232 |  |  | 1,229 |  |  | 6,323 |  |  | 46 |  |  | — |  |  | — |  |  | — |  |  | 7,830 |
with significant increase in credit risk | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
that are credit impaired | — |  |  | 8 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 8 |
Total | $ | 744,907 |  |  | $ | 463,585 |  |  | $ | 431,413 |  |  | $ | 30,645 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 1,670,550 |
The table below presents the Group's loan portfolio by credit quality classification as of March 31, 2024.
| Term Loans by Origination Fiscal Year
| 2024 |  | 2023 |  | 2022 |  | 2021 |  | 2020 |  | Prior |  | Revolving loans |  | Total
Mortgage loans | $ | 241,848 |  |  | $ | 458,401 |  |  | $ | 41,063 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 741,312 |
that are not credit impaired | 240,974 |  |  | 454,933 |  |  | 40,784 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 736,691 |
with significant increase in credit risk | 676 |  |  | 2,415 |  |  | 111 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 3,202 |
that are credit impaired | 198 |  |  | 1,053 |  |  | 168 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,419 |
Car loans | 196,305 |  |  | 66,403 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 262,708 |
that are not credit impaired | 193,302 |  |  | 55,427 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 248,729 |
with significant increase in credit risk | 1,590 |  |  | 2,232 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 3,822 |
that are credit impaired | 1,413 |  |  | 8,744 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 10,157 |
Uncollateralized bank customer loans | 210,612 |  |  | 34,568 |  |  | 8 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 245,188 |
that are not credit impaired | 200,211 |  |  | 30,337 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 230,548 |
with significant increase in credit risk | 4,715 |  |  | 1,072 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 5,787 |
that are credit impaired | 5,686 |  |  | 3,159 |  |  | 8 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 8,853 |
Right of claim for purchased retail loans | 130,291 |  |  | 15,694 |  |  | 167 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 146,152 |
that are not credit impaired | 130,291 |  |  | 15,694 |  |  | 167 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 146,152 |
with significant increase in credit risk | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
that are credit impaired | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Collateralized bank customer loans | 21,972 |  |  | 327 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 22,299 |
that are not credit impaired | 21,796 |  |  | 327 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 22,123 |
with significant increase in credit risk | 89 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 89 |
that are credit impaired | 87 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 87 |
Subordinated loan | — |  |  | 5,037 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 5,037 |
that are not credit impaired | — |  |  | 5,037 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 5,037 |
with significant increase in credit risk | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
that are credit impaired | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Other | 2,404 |  |  | 165 |  |  | 69 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 2,638 |
that are not credit impaired | 2,395 |  |  | 165 |  |  | 69 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 2,629 |
with significant increase in credit risk | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
that are credit impaired | 9 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 9 |
Total | $ | 803,432 |  |  | $ | 580,595 |  |  | $ | 41,307 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 1,425,334 |
Aging analysis of past due loans as of March 31, 2025 and March 31, 2024, is as follows:
| March 31, 2025
| Loans 30-59 days past due |  | Loans 60-89 days past due |  | Loans 90 days or more past due and still accruing |  | Current loans |  | Total
Mortgage loans | $ | 2,835 |  |  | $ | 678 |  |  | $ | 2,562 |  |  | $ | 918,455 |  |  | $ | 924,530 |
Uncollateralized bank customer loans | 3,132 |  |  | 2,099 |  |  | 17,262 |  |  | 226,955 |  |  | 249,448 |
Right of claim for purchased retail loans | — |  |  | — |  |  | — |  |  | 183,635 |  |  | 183,635 |
Car loans | 1,548 |  |  | 892 |  |  | 11,041 |  |  | 142,859 |  |  | 156,340 |
Collateralized bank customer loans | 957 |  |  | 1,135 |  |  | 271 |  |  | 146,396 |  |  | 148,759 |
Other | — |  |  | — |  |  | 8 |  |  | 7,830 |  |  | 7,838 |
Total | $ | 8,472 |  |  | $ | 4,804 |  |  | $ | 31,144 |  |  | $ | 1,626,130 |  |  | $ | 1,670,550 |
| March 31, 2024
| Loans 30-59 days past due |  | Loans 60-89 days past due |  | Loans 90 days or more past due and still accruing |  | Current loans |  | Total
Mortgage loans | $ | 2,133 |  |  | $ | 1,069 |  |  | $ | 1,419 |  |  | $ | 736,691 |  |  | $ | 741,312 |
Car loans | 2,167 |  |  | 1,655 |  |  | 10,157 |  |  | 248,729 |  |  | 262,708 |
Uncollateralized bank customer loans | 3,576 |  |  | 2,211 |  |  | 8,853 |  |  | 230,548 |  |  | 245,188 |
Right of claim for purchased retail loans | — |  |  | — |  |  | — |  |  | 146,152 |  |  | 146,152 |
Collateralized bank customer loans | — |  |  | 89 |  |  | 87 |  |  | 22,123 |  |  | 22,299 |
Subordinated loan | — |  |  | — |  |  | — |  |  | 5,037 |  |  | 5,037 |
Other | — |  |  | — |  |  | 9 |  |  | 2,629 |  |  | 2,638 |
Total | $ | 7,876 |  |  | $ | 5,024 |  |  | $ | 20,525 |  |  | $ | 1,391,909 |  |  | $ | 1,425,334 |
The activity in the allowance for credit losses as of March 31, 2025 and March 31, 2024 is summarized in the following tables.
| Allowance for credit losses
| Mortgage loan |  | Uncollateralized bank customer loans |  | Collateralized bank customer loans |  | Car loans |  | Right of claim for purchased retail loans |  | Other |  | Total
March 31, 2024 | $ | (3,033) |  |  | $ | (19,636) |  |  | $ | (80) |  |  | $ | (14,262) |  |  | $ | (6,577) |  |  | $ | (31) |  |  | $ | (43,619) |
Charges | (10,043) |  |  | (38,895) |  |  | (4,703) |  |  | (5,335) |  |  | (20,324) |  |  | (24) |  |  | (79,324) |
Recoveries | 1,694 |  |  | 6,778 |  |  | 1,524 |  |  | 6,761 |  |  | 8,331 |  |  | — |  |  | 25,088 |
Write off | 1 |  |  | 13,273 |  |  | 7 |  |  | 2,914 |  |  | — |  |  | 30 |  |  | 16,225 |
Forex | 682 |  |  | 3,001 |  |  | 138 |  |  | 1,457 |  |  | 1,237 |  |  | — |  |  | 6,515 |
March 31, 2025 | $ | (10,699) |  |  | $ | (35,479) |  |  | $ | (3,114) |  |  | $ | (8,465) |  |  | $ | (17,333) |  |  | $ | (25) |  |  | $ | (75,115) |
| Allowance for credit losses
| Mortgage loan |  | Uncollateralized bank customer loans |  | Collateralized bank customer loans |  | Car loans |  | Right of claim for purchased retail loans |  | Other |  | Total
March 31, 2023 | $ | (554) |  |  | $ | (233) |  |  | $ | — |  |  | $ | (758) |  |  | $ | (1,247) |  |  | $ | — |  |  | $ | (2,792) |
Adjustment to allowance for adoption of ASU 2016-13 | (2,216) |  |  | (7,436) |  |  | (35) |  |  | (6,462) |  |  | (9,046) |  |  | — |  |  | (25,195) |
Charges | (2,361) |  |  | (22,464) |  |  | (115) |  |  | (15,014) |  |  | (13,334) |  |  | (31) |  |  | (53,319) |
Recoveries | 2,132 |  |  | 10,795 |  |  | 71 |  |  | 8,181 |  |  | 17,095 |  |  | — |  |  | 38,274 |
Forex | (34) |  |  | (298) |  |  | (1) |  |  | (209) |  |  | (45) |  |  | — |  |  | (587) |
March 31, 2024 | $ | (3,033) |  |  | $ | (19,636) |  |  | $ | (80) |  |  | $ | (14,262) |  |  | $ | (6,577) |  |  | $ | (31) |  |  | $ | (43,619) |

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